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Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?
- a)No entry will be passed for such return of goods
- b)Entry for return of goods is passed by the seller
- c)Only the stock account will be adjusted
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
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Under sales on return or approval basis, when transactions are few and...
When goods sent on approval or return basis are returned, the original sales entry is reversed. As the sale entry is reversed at the end of accounting period itself, no entry is needed to be passed if the goods are returned subsequently. But, if the goods are approved subsequently, the original sales entry has to be passed once again.
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Under sales on return or approval basis, when transactions are few and...
No entry will be passed for such return of goods
When transactions are few and the seller at the end of the accounting year reverses the sale entry, there will be no entry passed for the return of goods by the customers on a subsequent date. This is because under the sales on return or approval basis, the seller does not recognize the revenue from the sale until the customer confirms the purchase by either keeping the goods or making the payment.
Explanation:
Under sales on return or approval basis, the seller allows the customer to return the goods within a specified period of time if they are not satisfied with the purchase or if the goods do not meet their expectations. This is a common practice in industries such as fashion, where customers may want to try on clothes before making a final decision.
In this scenario, the seller does not recognize the revenue from the sale until the customer confirms the purchase. This means that the sale entry is initially recorded but reversed at the end of the accounting year if the customer has not confirmed the purchase. Reversing the sale entry removes the revenue and related accounts from the financial statements.
If the customer returns the goods on a subsequent date, there is no need to pass an entry because the sale was never recognized in the first place. The goods can be simply returned to the inventory or adjusted in the stock account, depending on the accounting policy of the company.
However, it is important to note that if the customer confirms the purchase after the sale entry has been reversed, a new sale entry should be passed to recognize the revenue and related accounts. This is because the customer has now confirmed the purchase and the revenue can be recognized in accordance with the accounting principles.
In conclusion, under sales on return or approval basis, no entry is passed for the return of goods by the customers on a subsequent date if the sale entry has been reversed. This is because the sale was never recognized in the first place.
When transactions are few and the seller at the end of the accounting year reverses the sale entry, there will be no entry passed for the return of goods by the customers on a subsequent date. This is because under the sales on return or approval basis, the seller does not recognize the revenue from the sale until the customer confirms the purchase by either keeping the goods or making the payment.
Explanation:
Under sales on return or approval basis, the seller allows the customer to return the goods within a specified period of time if they are not satisfied with the purchase or if the goods do not meet their expectations. This is a common practice in industries such as fashion, where customers may want to try on clothes before making a final decision.
In this scenario, the seller does not recognize the revenue from the sale until the customer confirms the purchase. This means that the sale entry is initially recorded but reversed at the end of the accounting year if the customer has not confirmed the purchase. Reversing the sale entry removes the revenue and related accounts from the financial statements.
If the customer returns the goods on a subsequent date, there is no need to pass an entry because the sale was never recognized in the first place. The goods can be simply returned to the inventory or adjusted in the stock account, depending on the accounting policy of the company.
However, it is important to note that if the customer confirms the purchase after the sale entry has been reversed, a new sale entry should be passed to recognize the revenue and related accounts. This is because the customer has now confirmed the purchase and the revenue can be recognized in accordance with the accounting principles.
In conclusion, under sales on return or approval basis, no entry is passed for the return of goods by the customers on a subsequent date if the sale entry has been reversed. This is because the sale was never recognized in the first place.
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Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
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Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of Under sales on return or approval basis, when transactions are few and the seller at the end of the accounting year reverse the sale entry, then what will be the accounting treatment for the goods returned by the customers on a subsequent date?a)No entry will be passed for such return of goodsb)Entry for return of goods is passed by the sellerc)Only the stock account will be adjustedd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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